Coming to a frozen-food section, and possibly to a theater, near you pizza from California Pizza Kitchen.
Come October, the Beverly Hills-based restaurant chain will debut seven of its most popular pizzas in the frozen-foods section of supermarkets in Los Angeles, to be followed by a national rollout planned for early next year.
In addition, the company is negotiating with Kansas City, Mo.-based American Multi-Cinema Inc., operator of 211 AMC theaters nationwide, to introduce the restaurant’s pizzas at the movie chain. A final decision on that plan has yet to be finalized.
“People come to our restaurant for the food and this provides another avenue for them to buy it,” said Fred Hipp, president and chief executive of CPK.
AMC officials declined to comment last week.
While the theater “avenue” remains untested, Hipp said the frozen-pizza concept has met with resounding success since testing first began last October at markets in Atlanta, Sacramento, San Francisco, Buffalo and Rochester.
The nine-inch pies, which are an inch smaller than the restaurant variety, will retail for about $5 each, and will be produced, distributed and marketed for CPK by Glenview, Ill.-based Kraft Foods Inc.
CPK joins a host of other Southern California-based restaurant chains that are stocking their wares in supermarkets. They include Marie Callendar’s, Wolfgang Puck and Taco Bell. Just last week, El Torito debuted a line of salsas and salad dressings at Ralphs markets.
“We seem to be in a period of accelerated interest of supermarkets taking on new items. They add a new cachet to grocery-store shopping, and they keep the restaurant’s name top of mind for consumers,” said Ron Paul, president of Technomic Inc., a food-industry consulting firm in Chicago.
Last year, U.S. shoppers spent $2.1 billion on frozen pizzas, representing an 8.6 percent increase over the prior year, according to the National Frozen Food Association in Harrisburg, Penn. Roughly $700 million of those sales were for Kraft-made pizzas, sold under such brand names as Tombstone and DiGiorno.
Despite the numerous Kraft-made pizza products in market freezers, both CPK and Kraft officials said competition is not an issue, because CPK products will appeal to a customer who is distinct from, say, a Tombstone customer.
“Our products won’t compete against each other, but will appeal to different targets,” said Shelagh Thomee, Kraft’s associate director of corporate affairs.
Not to say entering the supermarket business is easy. Last year, U.S. companies launched over 25,000 new products, more than double the amount a decade ago, said Tom Vierhile, publisher of Productscan Online, an Internet database of new products. Nearly 80 percent of those fail, he said.
Yet, with Kraft’s experience, industry experts feel that the CPK line will do well. “It’s much easier to obtain shelf space when you’re a known brand and commodity. And, when you have a giant like Kraft on your side, that’s more than a leg up,” Vierhile said.
Kraft will pay an undisclosed licensing fee to California Pizza Kitchen for use of the chain’s name.
CPK has 87 locations and posted $180 million in sales for fiscal 1998.
